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What are outstanding shares?

Outstanding shares = shares outstanding

Also known as 'shares outstanding', this term refers to the shares that are owned by a company's shareholders. They include those which are owned by institutional investors, as well as restricted shares owned by company officials. The details of outstanding shares are listed on a balance sheet as 'capital stock'.

Where have you heard about outstanding shares?

Information regarding outstanding shares is used by investors to calculate a company's earnings per share and market capitalisation. As a result, you'll often see the term mentioned in company profiles that appear in the financial press.

What you need to know about outstanding shares.

The number of outstanding shares in a company can go up or down over time. If the company decides to issue new shares, to raise capital for example, the total will rise.

On the other hand, the number will decline if the company opts to buy some shares back through a repurchase scheme. A company may choose to go down this path if it feels its shares are undervalued. A buyback can increase the value of its remaining outstanding shares.

Find out more about outstanding shares.

For further information on how shares work, read our definition of stock exchange.

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